Taxation on Capital gain on shares & securities has always been a matter of concern for investors since special rates apply on Income from capital gain. In the table below, we have bifurcated the capital gain assets on the basis of period of holding & type of entities:

ASSETS PERIOD OF HOLDING SHORT TERM/ LONG TERM RESIDENT INDIVIDUAL /HUF DOMESTIC COMPANY /PARTNERSHIP FIRMS/ LLPS NON RESIDENTS/ FOREIGN COMPANIES
LISTED EQUITY SHARES/ UNITS OF EQUITY ORIENTED FUNDS > 12 Months LONG TERM Exceeding Rs. 1 lakh : 10%(without indexation) ( Section 112A) Exceeding Rs. 1 lakh: 10% (without indexation) ( Section 112A) Exceeding Rs. 1 lakh: 10% (without indexation) ( Section 112A)
< 12 Months SHORT TERM 15% (Section 111A) 15% (Section 111A) 15% (Section 111A)
UNLISTED SHARES > 24 Months LONG TERM 20% (Section 112) 20% (Section 112) 10% without indexation (Section 112 (1)( c))
> 24 Months SHORT TERM Slab Rates Normal Rates Normal Rates
DEBT MUTUAL FUNDS > 36 Months LONG TERM 20% (Section 112) 20% (Section 112) 20%
> 36 Months SHORT TERM Slab Rates Normal Rates Slab Rates
ZERO COUPON BONDS > 12 Months LONG TERM Lower of : 20% with indexation or 10% without indexation ( First Proviso of Section 112) Lower of: 20% with indexation or 10% without indexation ( First Proviso of Section 112) Lower of : 20% with indexation or 10% without indexation ( First Proviso of Section 112)
< 12 Months SHORT TERM Slab Rates Normal Rates Normal Rates
UNITS OF BUSINESS TRUST > 36 Months LONG TERM Exceeding Rs. 1 lakh : 10%(without indexation) ( Section 112A) Exceeding Rs. 1 lakh : 10%(without indexation) ( Section 112A) Exceeding Rs. 1 lakh : 10%(without indexation) ( Section 112A)
< 36 Months SHORT TERM 15% (Section 111A) 15% (Section 111A) 15% (Section 111A)
LISTED BONDS & DEBENTURES > 12 months LONG TERM 10% without indexation ( First Proviso of Section 112) 10% without indexation ( First Proviso of Section 112) 10% without indexation ( First Proviso of Section 112)
> 12 months SHORT TERM Slab Rates Normal Rates Normal Rates
UNLISTED BONDS & DEBENTURES > 36 Months LONG TERM 20% without indexation ( Section 112 r.w.s 48) 20% without indexation ( Section 112 r.w.s 48) 20% without indexation ( Section 112 r.w.s 48)
> 36 Months SHORT TERM Slab Rates Normal Rates Normal Rates

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Author is CA Vidhu Duggal helping in advisory on domestic & International taxation issues. She is also founder of Vidhu Duggal & Company, Chartered Accountants, a Chartered Accountancy firm with its head office at New Delhi and can be reached at [email protected] or +91-9268747482.

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4 Comments

  1. R. C. Pareek says:

    I made Short term capital gain of about Rs 2.50 lacs in accountin year 2020-21 by sale of Shares of listed companies . I also made Long term capital Loss on CPS ETF Rs 59100 . sold during the year I also made short term Shares loss in earliar years . Can I adjust long terms loss in CPS ETF againt Short term porofit .Secondly can I Set off earlier year losses aginst l current year profit

  2. Vasudevan says:

    I have sold the unlisted shares of a startup at the end of August. I need to pay STCG tax as I held them for less than 24 months. I got the amount into my account by end of Aug, 2021 and what is the maximum time I have to pay the tax? I’m a salaried employee of another company now. Can I wait till the end of this FY or should I pay this tax immediately?

  3. T.BHATIA says:

    for LTCG on shares purchased direct from comoany as initial public issue in year 1990 NO STT paid as it didnot exist but sold incurrent year by paying STTon sale why exemtion upto one lakh not available as current provision also mentions !0% tax on shares above limit of Rs.one lakh does this not mean that below one lakh there will be no tax This is confusing. Kindly give your views.

  4. CA Devinder Kumar says:

    The Income Tax treatment of DEBT mutual fund and unlisted shares and debentures should be same. However, in your article, the income tax rate of 10% without indexation for debt mutual funds has not been disclosed.

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